The Federation of Indian Chambers of Commerce and Industry’s economic outlook study reduced the estimated gross domestic product growth for 2022—23 from 7.4 % to 7 % due to ongoing geopolitical instability.
According to the industry association, “there was a universal agreement among the participants that even if the Indian economy is projected to undergo a downturn in the near-to-medium term, it would nevertheless expand continuously to emerge as the fastest growing economy in the world.”
The country is not immune to global volatility, as seen by the rising prices and growing market uncertainty, which are having a noticeable effect on India’s economic prospects, it added. According to the poll, industry and the services sector are expected to rise by 6.2 % and 7.8 %, respectively, while agriculture and related activities are predicted to grow by 3 percent in 2022—2023.
Retail inflation is predicted to be 6.7 % for 2022—2023, and at the conclusion of that fiscal year, the Reserve Bank of India’s policy repo rate is predicted to increase from 4.9 % to 5.65 percent.
The Reserve Bank of India will maintain its hawkish posture in its next monetary policy meetings for the remainder of the year, and then it may switch to a neutral stance, according to the FICCI. The government should develop a clear plan that may necessitate action at several levels since upside risks to inflation remain a concern.
In order to reduce inflation, the FICCI advises that states be encouraged to implement tax reductions on gasoline and diesel as well as the inclusion of petroleum and natural gas under the goods and services tax. The balance between the fiscal and monetary policies will continue to be essential, according to the poll respondents, and it will be necessary that the central bank and the government continue to work together. The poll predicts that imports will be $727.5 billion and exports will be $460 billion in 2022—23.
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